CPI-inflation accelerated in November, but core inflation data still looks quite favorable

HUNGARY - In Brief 10 Dec 2024 by Istvan Racz

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The headline rate of CPI-inflation rose to 3.7% yoy in November, from 3.2% yoy in the previous month, on a 0.5% increase in the CPI in November alone. However, core inflation was only 0.3% mom, 4.4% yoy, the latter moving marginally downwards, from 4.5% yoy in October. The headline rate rose essentially because fuel prices went up by 2.4% mom, and food prices also rose by 0.9% mom, the latter in part driven by seasonal food items. Non-fuel inflation was 0.4% mom, 4% yoy, the year-on-year rate unchanged from October. Note: Yoy changes in percent; Sources: KSH and own estimates The year-on-year headline inflation number met the median analyst expectation exactly. Perhaps even more importantly, both the headline and the core rates came out below the MNB's late-September monthly forecast (the one in the Q3 inflation report), which was 3.8% yoy for headline and 5% yoy for core, as far as the November data is concerned. Regarding last month's somewhat dubious occurrence of -6.8% mom for the prices of telephone and internet services, there was no price change at all taken into account by KSH for November in that category. Unfortunately, the sharp October drop remained inappropriately explained, as KSH failed to make any statement on that subject, and there were only some hints in the local media that it was due to some one-time sales action at one service provider (Magyar Telekom), which on the other hand was not particularly visible, neither in terms of its existence, nor in terms of its actual impact. We just hope that no similar incidents will occur at any time in the future. As regards the likely policy consequences, we think that current inflation data would justify a fu...